THE HONG KONG DAILY PRESS, TUESDAY, APRIL 8, 1930,
GOLD STANDARD ON SILVER BASIS.
CHINESE EXPERT'S SCHEME.
IMPORT TAX AND EXPORT REBATE TO STABILISE THE DOLLAR.
In a recent issue of the C'hian Critic there appears an article by Mr. C. Sun in which a novel suggestion is made for stabilising the dollar. Mr. Sun is an expert of the Bureau of Statistics and Editor-in-Chief of the Statistical Monthly. He has made a careful study of the silver question, and has published two research articles in Vol. I, No. 6 and Vol. II, No. 1 of that periodical, as well as many shorter articles in the daily papers. The present article proposes a scheme which, though to some extent resembling the simple fixed import tax on silver proposed - by many others, is really an entirely different thing in that it aims at stabilising and not enhancing the value of the silver dollar, and is really a scheme for establishing a gold exchange standard without using gold We quete as follows-
Much discussion has been lavish ed of late on the question of an import tax on silver in China. To the present writer the levying of a axed import duty in China on the ine of the Indian silver tux is hariful or at least useless. But a little modification of the scheme might improve matters and secure to China a gold standard without using gold. The plan is very simple.
Let us assume that the Chinese dollar should be, maintained at an exchange rate of 40 cents gold per silver dollar. Then, the simplest way to attain this object is to im pose a flexible import tax in such a manner that the actual geld value of the silver, dollar (according te its silver contents) plus the tax just equale 40 cents gold. That is, if at world price the silver contents of a dollar are worth only 30 cents, an import duty equivalent to 10 cents gold should be imposed to make up the difference Should silver fall further so that a dollar is worth only 20 centa, an addition, al duty of cents would be im posed. But a mere import tax is not enough. In order to maintain the price of silver in China (in terms of gold) at er around 40 eents gold, exporters of silver from China should be given a rebate equivalent to the current import tax. By this means the price of the silver dollar in China would automatically adjust itself to the 40 cent rate. For, when the price of the dollar falls to 30 cents in China, it will be profitable for an exporter to export silver and self it abroad, because by so doing he will receive 20 cents as rebate (as the kible import tax always moves according to the world price of silver). On the other hand, when it rises to 41 cents in China,
the importation of an equal amount, the import or export of silver by would yield the same profit. (Trans-raising or lowering the import tax portation cost ignored in both beyond what is necessary to keep cases). Thus, the exchange rate of the dollar ut par. Thus, a weapon is put in the band of the Govern the silver dollar could never go
ment to defend the country against beyond the silver import and ex- We have con- port points, and sequently, a gold standard without gold.
How the Scheme Works.
To show the working of the sys.... te more clearly, let us assume that at a particular moment the balance of international payments is unfavourable to China so that the exchanges more against her. At this time the price of the dollar in China would fall below the 40 cent rate. Immediately silver would ie exported. Since the exporta- tion of a silver dollar always equals an exportation of 40 cents gold (world price plus rebate), the debtor in Chias suffers no loss by shipping silver abroad.. On the other hand, if the balance of pay- ments is in China's favour, an in- flow of silver would follow. And as the payment of an equal sum of silver to China always requires the same amount of gold (world price plus import tax), the foreign debtor makes no gain. The working is as simple as in a gold standard coun- try, the only complication being the tax collection and the rebate.
An objection to this scheme is that since free coinage is a neces- aary corollary to this plan, silver would flow incessantly into this country in exchange for goods. The result would be that China is flooded with silver and loses a part of her "wealth." To this criticism it may be answered that in this re- peet the present situation is no better (except a little smuggling after the imposition of a tax). Be sides, if this plan is adopted, China could artificially encourage
an over-supply, of silver. In this respect the import duty resembles the discount rate of a central bank.
The Government's Position. The important question is, has the Government the financial means to carry out such a scheme i The answer to this question depends on the net movement of silver, Should there be a not import, the Govern ment would presumably gain by the scheme. Should there be a net export, it would suffer a loss. Now it is a well-known fact that during the last twenty years China is silver importing country (war time excepted). That this importation is the normal result of her balance of payments may be easily scene, a China has regular invisible exports which, besides covering up the net trade imports, has a certain sur plus. Since the situation has been so for the last twenty or thirty years, it will not be changed by a mere stabilisation of the Chinese So by adopting the above system it is expected that the Government will have nothing to lose. It is true that sezional
currency.
TWO POLICEMEN SHOT.
GUNMEN BUSY IN SHANGHALI.
JAPANESE SAILORS IN ROUTE MARCH.
SHANGHAI KUOMINTANG OPPOSES MOVEMENTS.
Nearly 1,500 sailors from the rari. ous Japanese destroyers which arrived in Shanghai last Sunday held a route march through the Settlement and later marched, un armed, to the Japanese cemetery in Chapel.
Shanghai, April 1-Chinese Po lice Constables 403 and 2138 were shot last night in a running fight with armed robbers in the Gordon Road district, the wounds of the former being of a fatal nature. He died whilst being taken to hospital. The affair occurred following an armed roubery in an unnumbered country house off Chongping Road
Leaving the Customs Jetty at at 8, p.m. Five armed men had en- tered the house and, after intimidat-nine o'clock, they marched along ing the inmates, gathered together the Bund, down Broadway and Se- booty valued at approximately ward Road, into Minghong Road, 8300.
along Woosung Road, down Range An alarm was raised by a pas. Road and into North Stechen ser-by who happened to notice Rond to the headquarters of the suspicious-looking characters stand. Japanese Landing Forec, Here, ing outside the house." He immedi- they rested for a while, after which ately reported the matter to a Sikh they crossed into Chapel. It had constable on point duty at the cor-been anticipated that some trouble ber of Markham Road and the lat might arise with the Chinese au- ter in turn notified the station.thorities but apparently this was
A squad of foreign and Chinese police were rushed to the spot and they met the robbers as they came out. A running batle ensued, în the course of which the two com- stables were brought down. Owing to the darkness, the robbers were able successfully to escape. The two constables were taken to the police hospital, but No. 463 died on the way-3.0. Daily News.
difficulties could be met without undue difficulty. After one or two years the position will be quite
| stable, and the shifting to 2 read gold or gold exchange standard will be made very easy.
avoided by the fact that the men crossed into Chinese territory un armed. They later returned with- out incident.
Apropos of the arrival of the visiting Japanese destroyer fotilla,
the Fifth Sectional Branch of the Kuomintang issued an announce- ment in which the writers said that it was a disgrace for China to allow
foreign merchantmen to sail freely in China's waters but now the Japanese Government has disre garded all Chinese, protests and looked down upon the Chinese be ed step of sending a large number causa it has taken the unprecedent- of its men-of-war up the Yangtze and to various Chinese ports. Un- der the pretext that it is giving Gold Standard Unnecessary. the crews practical training during Another merit of the suggested the trip, says the announcement, scheme is that it does not peces the Japanese Government is send sarily bind Chips to the gold stan- ing her naval agents to China to dard. The general prices of gold spy on China's naval and military countries are falling. According to defensive measures so as to enable many eminent economists, they will it to invade China in future with fall further. If China adopts the out, encountering any resistance. gold standard once and forever, it The announcement goes on to aay would only mean a change from in- that, during the present time, when flation to deflation. While recogniz- the Central Government is making demands have to be considered anding that there is a difference of all arrangements to engage the re- the first outflow might be very degree, yet the result is not ideal.bels in a final and decisive battle, heavy, but by making the standard By adopting the above system she the arrival of the Japanese war vessels in the interior cannot be rate, ie, the rate to be always could prefer either price stability maintained in the future, moderate- or exchange stability as she pleases. tolerated because the Japanese im-- ly low, preferably a little lower Should she choose the former, she perialists will endanger the nation than the gold worth of the silver could easily change the standard and the Kuomintang by informing dollar at the time of stabilisation rate (40 cents in our illustration) the enemy rebels of what they have (the 40 cent rate assumed abore is from time to time in order to ad- learned. In conclusion, the writers call upon their fellow-countrymen only for illustration), by providing just it to a fixed price level. In a suitable reserve, and by some that case the Chinese dellar would not to cease their anti-Japanese ac kind of regulation or restriction nt resemble very much the camper- tivities until Japan is forced to withdraw her gunboats from China. the first stage, it seems that these sated dollar of Prof. Irving Fisher,
(Continued on next Onlumn.)
--N.-C. Daily News while the working is much simpler.
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FASHION NOTES.
SUMMER 1930..
Kalle-Pleated Frilla.
Most of these dresses have long, close-fitting sleeves. The neck may he V-shaped or rounded, many of
·little' them being finished with knife-pleated frill of white lawn or georgette. The bolero is often used for the bodies, and there is invariably a waist band, unless the dress is out to fit perfectly "round the waist. The skirts get their ful- mess either from godets, panels put in at an angle, or from wide font. ing panels
Many of the coats have little shouldercupes cut in the most ex- traordinary way, sometimes over ene shoulder and sometimes hang- ing down in an uneven point. Others have a half-yoke at the back and collar made of stamped velvet, which gives the impression of close. ly sharn black broadtail.
Shantung, in the heaviest possible. quality, is going to be used again more than ever this summer for day dresses. There is also a new
New Sleeves. kind of shantung of the same heavyThe creators of fashion in Paris quality, in pala colours with tiny
consider themselves in honour black pin-dots, that the
Paris bound to introduce a certain num- dressmakers have appropriated for
ber of novelties every season. Their costs and skirts.
contributions to 1930 include one or two new kinds of sleeves. Thero is, for instance, the patterned crepe: de Chine dress with a little sleeve which reaches exactly half way be tween shoulder and elbow, and has cuff "of white lawn edged with
Another type
is the three- On the whole the printed materi. quarter length sleeve which is als used for afternoon dresses have to be found on some of small all-over patterna. The very | the evening coats: Again, there soft-coloured satin with the white is a very long tight sleeve made in pin-dot that was so popular last summer is also fashionable this sea- son, and the cravat silk that men's tins are made of is also used for women's afternoon dresses
Paris fashion experts still helieve in black for their smartest day dresses. Black satin, black crepe de Chine, and black georgette aro uned for afternoon dresses, and black cloth, hopsack and heavy crepe de Chine for their afternoon ¦ lace. coats.
coats now.
and
contrasting colours, or of contrast- ing materials. One colour or ma terial is used from wrist to elbow, and joins the contrasting material or colour at an angle from the elbow to shoulder.
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